LANDLORDTENANT SUBROGATION IN ALL 50 STATES

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LANDLORDTENANT SUBROGATION IN ALL 50 STATES Powered By Docstoc
					               LANDLORD/TENANT SUBROGATION IN ALL 50 STATES

                                            By Gary L. Wickert
                                     Matthiesen, Wickert & Lehrer, S.C.
                                            www.mwl-law.com

The rule of subrogation known as the ASutton Rule@ states that a tenant and landlord are automatically
considered Aco-insureds@ under a fire insurance policy as a matter of law, and therefore the insurer of the
landlord who pays for the fire damage caused by the negligence of a tenant may not sue the tenant in
subrogation because it would be tantamount to suing its own insured. The ASutton Rule@ is derived from an
Oklahoma Court of Appeals decision styled Sutton v. Jondahl, 532 P.2d 478 (Okla. App. 1975) and is the
benchmark against which the landlord/tenant subrogation laws of most states is measured.

ALABAMA
If a lease clearly and unambiguously states that each party agrees to cause any fire insurance policy on the
property to contain a waiver of subrogation or endorsement under which the insurance company waives its
right of subrogation against any party to the lease agreement in the case of destruction or damage by fire,
each party waives any cause of action against the other in case their property is damaged by fire as the
result of other=s negligence. McCay v. Big Town, Inc., 293 Ala. 582, 307 So.2d 695 (Ala. 1975).

ALASKA
Fire insurer is not entitled, as subrogee, to bring action against tenant to recover for amounts paid to
landlord for fire damage to rental premises caused by tenant's negligence in absence of express agreement
between landlord and tenant to contrary. Landlord and tenant are co-insureds under fire policy. Alaska Ins.
Co. v. RCA Alaska Communications, Inc., 623 P.2d 1216, 1218 (Alaska 1981); However, a later case law
indicates that the tenant is a co-insured under the lease only if the lease expressly provides for same.
Great American Ins. Co. v. Bar Club, Inc., 921 P.2d 626 (Alaska 1996).

ARIZONA
Arizona has avoided per se rules and taken a more flexible case-by-case approach, holding that a tenant's
liability to the landlord's insurer for negligently causing a fire depends on the intent and reasonable
expectations of the parties to the lease as ascertained from the lease as a whole. General Accident Fire &
Life Assurance Corp. v. Traders Furniture Co., 401 P.2d 157 (Ariz. App. 1981).

ARKANSAS
Arkansas has avoided per se rules and taken a more flexible case-by-case approach, holding that a
tenant's liability to the landlord's insurer for negligently causing a fire will depend on the intent and
reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Page v.
Scott, 567 S.W.2d 101, 103 (Ark. 1978).

CALIFORNIA
California has avoided per se rules with regard to the ASutton Rule@ (see Oklahoma) and taken a more
flexible case-by-case approach, holding that a tenant's liability to the landlord's insurer for negligently
causing a fire depends on the intent and reasonable expectations of the parties to the lease as ascertained
from the lease as a whole. Fire Ins. Exch. v. Hammond, 83 Cal. App.4th 313, 99 Cal. Rptr.2d 596, 602
(2000).



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COLORADO
A landlord=s insurer may recover against tenant only if the landlord has the right to recover against tenant.
Employers Cas. Co. v. D. M. Wainwright, 473 P.2d 181 (Colo. 1970). The ultimate question presented is
whether provisions of the written lease between tenant and its landlord have circumscribed the landlord's
right of recovery under the circumstances of the case. U.S. Fidelity & Guar. Co. v. Let's Frame It, Inc., 759
P.2d 819 (Colo. App. 1988) (redelivery clause in lease has applicability only to premises subject to lease,
and cannot affect tenant=s liability for damage done to landlord=s other property).

CONNECTICUT
Tenants are co-insureds under a landlord=s fire insurance policy and may not be sued for their negligence
as they are an insured under the policy. St. Paul Fire & Marine Ins. Co. v. Durr, 2001 WL 984782 (Conn.
Super. 2001) (not reported in A.2d). This holding was first adopted in Sutton v. Jondahl, 532 P.2d 478
(Okla. Ct. App. 1975) (the ASutton Rule@). The Connecticut legislature has enacted a standard form of fire
insurance that all fire insurance policies issued in this state must conform. C.G.S.A. ' 38a-308. In regard to
the insurer's subrogation rights, the standard form includes a subrogation provision stating: AThis Company
may require from the insured an assignment of all right of recovery against any party for loss to the extent
that payment therefore is made by this Company.@ C.G.S.A. ' 38a-307. The subrogation clause set forth in
C.G.S.A. ' 38a-307 fails to provide an insurer with a direct, and inviolate, right of subrogation. It merely
provides that an insurer Amay require@ an insured to assign any rights he or she has to the insurer. Thus,
under this clear language, the right of recovery belongs to the insured, and the insurer only obtains that
right when the insured grants it. Wasko v. Manella, 849 A.2d 777 (Conn. 2004).

DELAWARE
Fire insurer is not entitled, as subrogee, to bring an action against tenant to recover for amounts paid to
landlord for fire damage to rental premises caused by tenant's negligence in absence of express agreement
between landlord and tenant to contrary. Landlord and tenant are co-insureds under the fire policy.
Lexington Ins. Co. v. Raboin, 712 A.2d 1011, 1016 (Del. Super. Ct. 1998).

FLORIDA
Florida has avoided per se rules with regard to the ASutton Rule@ (see Oklahoma) and taken a more flexible
case-by-case approach, holding that a tenant's liability to the landlord's insurer for negligently causing a fire
depends on the intent and reasonable expectations of the parties to the lease as ascertained from the
lease as a whole. Continental Ins. Co. v. Kennerson, 661 So.2d 325, 327 (Fla. App. 1995) (denied
subrogation because lease provided that damage caused by fire Ashall be repaired by and at the expense
of Lessor@).

GEORGIA
Georgia has avoided per se rules and taken a more flexible case-by-case approach, holding that a tenant's
liability to the landlord's insurer for negligently causing a fire depends on the intent and reasonable
expectations of the parties to the lease as ascertained from the lease as a whole. Tuxedo Plumbing &
Heating Co. v. Lie-Nielsen, 262 S.E.2d 794 (Ga. 1980).

HAWAII
Hawaii has not directly addressed this issue.




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IDAHO
Idaho has avoided per se rules with regard to the ASutton Rule@ (see Oklahoma) and taken a more flexible
case-by-case fire approach, holding that a tenant's liability to the landlord's insurer for negligently causing a
fire depends on the intent and reasonable expectations of the parties to the lease as ascertained from the
lease as a whole. Bannock Bldg. Co. v. Sahlberg, 887 P.2d 1052 (Idaho 1994).

ILLINOIS
Illinois has avoided per se rules with regard to the ASutton Rule@ (see Oklahoma) and taken a more flexible
case-by-case approach, holding that a tenant's liability to the landlord's insurer for negligently causing a fire
depends on the intent and reasonable expectations of the parties to the lease as ascertained from the
lease as a whole. Dix Mutual Ins. Co. v. LaFramboise, 597 N.E.2d 622, 625 (Ill. 1992). Although a tenant is
generally liable for fire damage caused to the leased premises by his negligence, if the parties intended to
exculpate the tenant from negligently caused fire damage, their intent B as expressed in the lease
agreement - will be enforced. To make this determination, the lease must be interpreted as a whole so as to
give effect to the intent of the parties. Stein v. Yarnall -Todd Chevrolet, Inc., 241 N.E.2d 439 (Ill. 1968). In
Dix, the lease did not contain a provision expressly apportioning fault in the case of a negligently caused
fire, so the court construed the lease Aas a whole@ and concluded that it did not reflect any intent that the
tenant would be responsible for fire damage. Absent any such intent, the tenant is considered a coinsured
with the landlord and an insurer may not sue its own insured for subrogation. The same outcome results
from an oral lease which contains only basic terms such as rent and duration of the lease. Cincinnati Ins.
Co. v. DuPlessis, 848 N.E.2d 220 (Ill. App. 2006). The rule, therefore, appears to be that a tenant will be an
implied coinsured and cannot be sued by the landlord's subrogee for fire or other damage unless a contrary
intent can be gleaned from the four corners of the lease itself.

INDIANA

Indiana has avoided per se rules with regard to the ASutton Rule@ (see Oklahoma) and taken a more flexible
case-by-case fire approach, holding that a tenant's liability to the landlord's insurer for negligently causing a
fire depends on the intent and reasonable expectations of the parties to the lease as ascertained from the
lease as a whole. United Farm Bureau Mutual Ins. Co. v. Owen, 660 N.E.2d 616 (Ind. App. 1996).

IOWA
Iowa has rejected the implied co-insured rationale and allowed the insurer to bring a subrogation claim
against the tenant, absent an express agreement to the contrary. Neubauer v. Hostetter, 485 N.W.2d 87,
89-90 (Iowa 1992).

KANSAS
Absent an agreement by the landlord to provide insurance for the tenant, subrogation against a tenant
appears to be allowed. Under a lease agreement providing that lessor would purchase fire insurance for
adequate protection of improvements on leased premises and lessee would maintain premises in good
repair Adamage by fire or other casualty being expressly excepted@, lessor's obligation to insure premises
inured to benefit of both parties. The exemption from Adamage by fire or other casualty@ included all fires
except those which, generally speaking, would be classed as arson, and lessee was not liable for loss by
fire resulting from its negligence. New Hampshire Ins. Co. v. Fox Midwest Theaters, Inc., 457 P.2d 133
(Kan. 1969). Kansas also has a statute which governs the liability of tenants:

        K.S.A. ' 58-2555. Duties of Tenant. (f) be responsible for any destruction, defacement,
        damage, impairment or removal of any part of the premises caused by an act or omission of



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        the tenant or by any person or animal or pet on the premises at any time with the express or
        implied permission or consent of the tenant.

Independent of the above statute and an express agreement to insure the tenant, Kansas law imposes an
obligation on a tenant to return the premises to the landlord at the end of a rental term unimpaired by the
tenant=s negligence. Salina Coca-Cola Bottling Corp. v. Rogers, 237 P.2d 218 (1951).

KENTUCKY
A tenant's liability to the landlord's insurer for negligently causing a fire depends on the intent and
reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Britton v.
Wooten, 817 S.W.2d 443, 445-47 (Ky. 1991) (subrogation allowed because there was no clause requiring
purchase of fire insurance by landlord).

LOUISIANA
Specific lease provisions will prohibit subrogation against a tenant. A lease provision, under which lessor
agreed to carry fire insurance on property and released and discharged lessee Afrom any and all claims and
damages whatsoever from any cause resulting from or arising out of any fire@ constituted release from fire
damage acknowledged to have been caused by lessee's negligence, and extinguished any subrogation
recovery by lessor's insurer. Home Ins. Co. of Illinois v. National Tea Co., 588 So.2d 361 (La. 1991). The
intent of the parties as determined from the terms of the lease is paramount.

MAINE

Fire insurer is not entitled, as subrogee, to bring action against tenant to recover for amounts paid to
landlord for fire damage to rental premises caused by tenant's negligence in absence of express agreement
between landlord and tenant to contrary. Landlord and tenant are co-insureds under the fire policy. N. River
Ins. Co. v. Snyder, 804 A.2d 399, 403-04 (Me. 2002).

MARYLAND
A tenant=s liability for damage to the leased premises in a subrogation action brought by the landlord=s
insurer after paying the claim should be determined by the reasonable expectations of the parties to the
lease, as determined from the lease itself and any other admissible evidence. Rausch v. Allstate Ins. Co.,
882 A.2d 801 (Md. 2005).

MASSACHUSETTS
Massachusetts follows the Aimplied coinsured doctrine@. The term Ainsured@ impliedly includes the tenant.
Peterson v. Silva, 704 N.E.2d 1163 (Mass. 1999). Absent an express provision in a lease establishing a
tenant=s liability, the landlord=s insurance is deemed held for the mutual benefit of both parties. When a
residential landlord sues a tenant for damages to the landlord=s, the implied coinsured doctrine presumes
that the landlord=s liability insurance is held Afor the mutual benefit of both parties@. This rule applies to
residential leases but is generally inapplicable to commercial leases. Federal Ins. Co. v. Commerce Ins.
Co., 2008 WL 4873959 (D. Mass. 2008).

Massachusetts recognizes that while courts have not distinguished between commercial and residential
tenancies in applying Sutton (see Oklahoma), commercial tenancies present different considerations, for
A[c]ommercial tenants tend to be more sophisticated about the terms of their leases and, unlike residential
tenants, commercial tenants generally purchase liability insurance@; thus, commercial tenants will be
relieved of liability for negligently caused fire damage only if the lease reveals the parties so intended.
Seaco Ins. Co. v. Barbosa, 761 N.E.2d 946, 950 (Mass. 2002).

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MICHIGAN
Michigan follows ASutton Rule@ (see Oklahoma). Fire insurer is not entitled, as subrogee, to bring action
against tenant to recover for amounts paid to landlord for fire damage to rental premises caused by tenant's
negligence in absence of express agreement between landlord and tenant to contrary. Landlord and tenant
are co-insureds under fire policy. N.H. Ins. Group v. Labombard, 399 N.W.2d 527, 531 (Mich. App. 1986).

MINNESOTA
Tenants are co-insureds under their landlord's fire insurance policy for purposes of subrogation actions.
United Fire & Cas. Co. v. Bruggeman, 505 N.W.2d 87 (Minn. App. 1993).

MISSISSIPPI
There do not appear to be any restrictions on the ability of a landlord=s insurer to pursue the tenant for
subrogation as a result of damages paid by the insurer which were caused by the tenant. Paramount Ins.
Co. v. Parker, 112 So.2d 560 (Miss. 1959).

MISSOURI
A tenant may be considered to be "co-insured" under the insurance policy obtained by the lessor where it
was clear that the parties intended to look only to insurance, rather than each other, to pay damages
caused by negligence. This intent must be determined from the four corners of the lease. Jos. A. Bank
Clothiers, Inc. v. Brodsky, 950 S.W.2d 297, 303 (Mo. App. 1997). The Brodsky court found such intent from
a surrender clause of the lease. That clause provided that the lessee would surrender possession of the
leased premises to lessor in good condition, “loss by fire, casualty, providence and deterioration excepted.”
Where a lease requires the landlord to carry insurance and provides there’s to be no subrogation right
between the parties, it may be determined that the parties intended to look only to insurance, rather than
each other, for any loss or damage to the premises. Rock Springs Realty, Inc. v. Waid, 392 S.W.2d 270,
274 (Mo. 1965). An insurer cannot subrogate against its own insured, since, by definition, subrogation
arises only with respect to the insured’s rights against third persons to whom the insurer owes no duty.
Therefore, no right of subrogation arises against a person who holds the status of an additional insured, or
against a tenant who is determined from the intent of the parties to be an implied “co-insured.” Brodsky,
supra. Where a party is required by contract to carry insurance for the benefit of another, that party will be
treated as a co-insured. Id.

MONTANA
Montana adheres to the rule that no right of subrogation can arise in favor of an insurer against its own
insured since, by definition, subrogation exists only with respect to rights of insurer against third persons to
whom insurer owes no duty. Home Ins. Co. v. Pinski Bros., Inc., 500 P.2d 945 (Mont. 1972). However,
there have been no cases addressing whether a tenant is considered an implied co-insured.

NEBRASKA
Absent an express agreement to the contrary in a lease, a tenant and his or her landlord are implied co-
insureds under the landlord's fire insurance policy, and the landlord's liability insurer is precluded from
bringing a subrogation action against the negligent tenant. Tri-Par Investments, L.L.C. v. Sousa, 680
N.W.2d 190 (Neb. 2004).




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NEVADA
It is not uncommon for the lessor to provide fire insurance on leased property. As a matter of sound
business practice, the premium to be paid had to be considered in establishing the rental rate. Such
premiums would be chargeable against the rent as an overhead or operating expense. Accordingly, the
tenant actually paid the premium as part of the monthly rental. Courts consider it an undue hardship to
require a tenant to insure against his own negligence, when he is paying, through his rent, for the fire
insurance which covers the premises. Fire insurer is not entitled, as subrogee, to bring action against
tenant to recover for amounts paid to landlord for fire damage to rental premises caused by tenant's
negligence in absence of express agreement between landlord and tenant to contrary. Landlord and tenant
are co-insureds under fire policy. Safeco Ins. Co. v. Capri, 705 P.2d 659, 661 (Nev. 1985).

NEW HAMPSHIRE
New Hampshire follows the ASutton Rule@ (see Oklahoma). A landlord=s insurer may not pursue a tenant for
any damages caused by the tenant=s negligence because the tenant is considered an implied co-insured.
Cambridge Mutual Fire Ins. Co. v. Crete, 846 A.2d 521 (N.H. 2004). In addition, a landlord may not pursue
the tenant for uninsured losses it sustains.

NEW JERSEY
If landlord has claim against tenant, existence of insurance obtained by landlord, paid by landlord, for the
benefit of landlord, does not exculpate tenant from consequences of negligent conduct, absent express
agreement to that effect. Zoppi v. Traurig, 598 A.2d 19 (N.J. Super. 1990).

NEW MEXICO
Where lease indicated that parties failed to agree that one, or both, of them would carry fire insurance, and
where there was no specific exculpatory language relieving tenant from liability for negligence, tenant was
liable for negligently having caused a fire in the leased premises. Acquisto v. Joe R. Hahn Enterprises, Inc.,
619 P.2d 1237 (N.M. 1980).

NEW YORK
New York has rejected the implied co-insured rationale and allowed the insurer to bring a subrogation claim
against the tenant, absent an express agreement to the contrary. Galante v. Hathaway Bakeries, Inc., 6
A.D.2d 142, 176 N.Y.S.2d 87, 92 (1958). The principles underlying the subrogation doctrine and anti-
subrogation rule in New York does not support the fiction that the tenant is an implied co-insured of the
landlord, and subrogation is therefore allowed. Phoenix Ins. Co. v. Stamell, 21 A.D.3d 118, 796 N.Y.S.2d
772 (N.Y.A.D. 4 Dept. 2005).

NORTH CAROLINA
North Carolina has rejected the implied co-insured rationale and allowed the insurer to bring a subrogation
claim against the tenant, absent an express agreement to the contrary. Winkler v. Appalachian Amusement
Co., 238 N.C. 589, 79 S.E.2d 185, 190 (1953).

NORTH DAKOTA
A tenant's liability to the landlord's insurer for negligently causing a fire depends on the intent and
reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Agra-By-
Products, Inc. v. Agway, Inc., 347 N.W.2d 142, 146-150 (N.D. 1984) (subrogation denied because lease
required lessor to keep insurance and lessee to reimburse lessor for premiums).

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OHIO
A tenant's liability to the landlord's insurer for negligently causing a fire depends on the intent and
reasonable expectations of the parties to the lease as ascertained from the lease as a whole. United States
Fire Ins. Co. v. Phil-Mar Corp., 166 Ohio St. 85, 139 N.E.2d 330, 332 (1956) (denied subrogation because
lease provided that tenant would pay possible increase in fire insurance premiums due to tenant's
activities).

OKLAHOMA

Fire insurer is not entitled, as subrogee, to bring action against tenant to recover for amounts paid to
landlord for fire damage to rental premises caused by tenant's negligence in absence of express agreement
between landlord and tenant to contrary. Landlord and tenant are co-insureds under the fire policy. Sutton
v. Jondahl, 532 P.2d 478 (Okla. App. 1975) (known as the ASutton Rule@).

OREGON
Oregon rejects blanket following of ASutton Rule@ (see Oklahoma) which holds tenant is implied co-insured.
Whether the landlord=s insurer can subrogate against the tenant depends on the facts of the case and the
language of the lease. Koch v. Spann, 92 P.3d 146 (Or. App. 2004). Where the lease provides that the
landlord will provide Afull fire insurance coverage on all of the leased property for all of the parties and that
the premiums therefore were included in the monthly lease payments@ or AOWNER TO FURNISH FREE OF
CHARGE Y [f]ire insurance in the amount equal to the value of the equipment Y@, the court recognized as a
complete defense to either a direct action or a subrogation claim the landlord's contractual obligation to
maintain fire insurance. Permitting the owner or lessor to proceed against the tenant or lessee would
deprive the latter of the benefit of what it bargained for: insurance against liability for its own negligence.

PENNSYLVANIA
It depends on the language of the lease. If the lease requires the landlord to provide fire insurance, the
landlord=s carrier cannot subrogate against the tenant. If the lease requires the tenant to obtain fire
insurance, the landlord=s carrier can subrogate. Remy v. Michael D's Carpet Outlets, 571 A.2d 446 (Pa.
Super. 1990).

RHODE ISLAND
A tenant's liability to the landlord's insurer for negligently causing a fire depends on the intent and
reasonable expectations of the parties to the lease as ascertained from the lease as a whole. 56 Assocs. v.
Frieband, 89 F.Supp.2d 189, 194 (D.R.I.2000) (subrogation allowed where lease did not address question
of fire insurance).

SOUTH CAROLINA
South Carolina statute provides as follows:

        ' 38-75-60. Cause of action by insurer against tenant. Notwithstanding any other provision
        of law, no insurer has a cause of action against a tenant who causes damage to real or
        personal property leased by the landlord to the tenant when the insurer is liable to the
        landlord for the damages under an insurance contract between the landlord and the insurer,
        unless the damage is caused by the tenant intentionally or in reckless disregard of the rights
        of others.




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SOUTH DAKOTA

South Dakota rejects the blanket following of the ASutton Rule@ (see Oklahoma) which holds that the tenant
is an Aimplied co-insured@ of the landlord=s insurer. American Family Mut. Ins. Co. v. Auto-Owners Ins. Co.,
2008 WL 4816666 (S.D. 2008). Instead, South Dakota adopts the case-by-case approach as a better
reasoned rule that recognizes the intent of the parties under contract law and the equitable underpinning of
subrogation. Subrogation may be denied under the case-by-case approach if the lease expressly requires
the landlord to maintain fire insurance or the lease exonerates a tenant from losses caused by a fire.

TENNESSEE

According to a U.S. Federal District Court, a tenant's liability to the landlord's insurer for negligently causing
a fire depends on the intent and reasonable expectations of the parties to the lease as ascertained from the
lease as a whole. Tate v. Trialco Scrap, Inc., 745 F.Supp. 458, 467 (M.D. Tenn. 1989) (subrogation denied
because lease required lessor to purchase insurance coverage on building). Since then, however, in an
unreported decision (limited precedential value) the Tennessee Court of Appeals has decided that the case
by case review of the lease terms to determine the intent and expectations of the parties is not the best
approach, and has indicated that absent an express agreement to the contrary, a tenant should be
considered a co-insured under the landlord's property casualty insurance policy, and the insurance carrier
should therefore be precluded from asserting subrogation rights against the tenant. Dattel Family Limited
Partnership v. Wintz, 2007 WL 2937794 (Tenn. App. 2007).

TEXAS
As a matter of law, insurer of leased premises had no subrogation claim against tenant for losses paid to
landlord when leased premises were destroyed by fire where lease agreement, signed by landlord and
tenant, contained limitation of liability clause which provided that neither party would be liable for insurable
casualty damage to leased premises, even though tenant had assigned its lease to third party prior to fire.
Interstate Fire Ins. Co. v. First Tape, Inc., 817 S.W.2d 142 (Tex. App. - Houston [1st Dist.] 1991). However,
the application of the ASutton Rule@ has never been addressed in Texas.

UTAH
Utah considers the tenant an implied co-insured for the Alimited purpose@ of subrogation. GNS Partnership
v. Fullmer, 873 P.2d 1157, 1162 (Utah Ct. App. 1994).

VERMONT
Vermont finds the case-by-case approach to be the most consistent with Vermont law. In determining the
rights of the parties to a lease, this court has consistently looked to the intent of the contracting parties as
ascertained from the terms of the lease. Fairchild Square Co. v. Green Mountain Bagel Bakery, Inc., 658
A.2d 31, 33 (Vt. 1995); Lamoille Grain Co. v. St. Johnsbury & Lamoille Cty. R.R., 369 A.2d 1389, 1390 (Vt.
1976).

VIRGINIA
A tenant's liability to the landlord's insurer for negligently causing a fire depends on the intent and
reasonable expectations of the parties to the lease as ascertained from the lease as a whole. Monterey
Corp. v. Hart, 224 S.E.2d 142, 147 (Va. 1976) (subrogation denied because lease contained "except fire"
provision).




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WASHINGTON
A landlord is presumed to carry insurance for tenant's benefit, as implied co-insured, absent express lease
provision to the contrary. Therefore, without more, the landlord's fire insurer has no subrogation rights
against tenants for loss to leased premises. Cascade Trailer Court v. Beeson, 749 P.2d 761 (Wash. App.
1988). A mutual understanding that a tenant will be relieved of liability for his own negligence may be
inferred from provisions of the parties' lease. For example, the lease may expressly require the lessor to
carry fire insurance covering the leased building, or it may prohibit the tenant from performing any acts
which would raise the cost of insurance. Other circumstances may also give rise to an inference that the
parties have mutually understood that the lessor would provide the insurance. Rizzuto v. Morris, 592 P.2d
688 (Wash. App. 1979).

WEST VIRGINIA
West Virginia has not directly addressed this issue.

WISCONSIN
Wisconsin Statute ' 704.07(3)(a) makes a tenant automatically liable to the landlord for damage to property
caused by the tenant=s negligence. A tenant is precluded from claiming co-insured status under the
landlord=s fire insurance policy so as to avoid subrogation where the lease is silent as to fire insurance
coverage. Bennett v. West Bend Mut. Ins. Co., 200 Wis.2d 313, 546 N.W.2d 204 (Wis. App.1996). The
statute reads as follows:

        ' 704.07 (3) Duty of Tenant. (a) If the premises are damaged by the negligence or
        improper use of the premises by the tenant, the tenant must repair the damage and restore
        the appearance of the premises by redecorating. However, the landlord may elect to
        undertake the repair or redecoration, and in such case the tenant must reimburse the
        landlord for the reasonable cost thereof; the cost to the landlord is presumed reasonable
        unless proved otherwise by the tenant.

WYOMING
Although Wyoming has not directly addressed this issue, the Wyoming Supreme Court has intimated that it
views a contractual provision to provide specific insurance as a waiver of subrogation rights with regard to
the risk insured against. Berger v. Teton Shadows, Inc., 820 P.2d 176 (Wyo. 1991).


If you have any questions regarding landlord/tenant subrogation, please contact Gary Wickert at
gwickert@mwl-law.com.



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